September 03, 2010

The mantra around CBL has always been "The legal environment in California is different." Here's an article by Luce Forward's Mike Pappas in today's Corporate Counsel that says exactly this. And the five biggest differences he lists?

Covenants not to compete;

Wage and hour class actions;

Proposition 65;

Anti-deficiency statutes; and

State anti-trust laws.

I agree with these, but there's lots more. How about these:

No Daubert. In fact, as a practical matter, no Fry.

The "Consumer Expectation Test" in product liability cases. Or to use Mike's format, "what do you mean we can't tell the jury all the design considerations that went into our product?"

Joint and several liability under Proposition 51. "What do you mean you can't predict how much of the verdict we might have to pay if everybody else settles?"

Automobile Sales Finance Act. "What do you mean the consumer can get use of his car for free for four years because we mis-dated the sales contract by two days?"

September 02, 2010

The new -- and excellent -- "At The Lectern," Horvitz & Levy's new blog on Supreme Court practice, provides a reminder on why the California Supreme Court is so important. From 1940 to 2005:

1,260 of the California Supreme Court’s decisions have been followed at least once by another state’s supreme court. The Washington Supreme Court was next, with 942 followed decisions. The median for all fifty state high courts was 453.

Furthermore,

60 of the Court’s decisions were followed three or more times by other states’ high courts. Washington was again second, but with just 72 decisions cited three or more times.

One of Cal Biz Lit's themes has always been that the law in California isn't necessarily worse, isn't necessarily better, but sure as shootin' is different, and out-of-staters ignore those differences at their peril. The study Horvitz & Levy cites makes another point: if you non-Californians think we're a little goofy here, just wait: your time is coming.

Horvitz and Levy's other blog, the appropriately named "California Punitive Damages, An Exemplary Blog" has long been the best comprehensive on-line source on its subject. CBL is now pleased to add the firm's most recent effort to our (somewhat smugly named) "Cal Biz Lit's Approved Blogs."

My only quibble with the two sites: Folks, how about some pictures? I'll get you started with a lectern.

September 01, 2010

In a California strict product liability case, the plaintiff gets his choice of ways to prove the product was defective. He can use the "risk/benefit test," which asks whether the benefits of the challenged design outweigh the risk of danger inherent in the design. Or he can use the "consumer expectations test," which asks whether the product performed as safely as an ordinary consumer would expect when used in an intended and reasonably foreseeable manner. The two tests come from the Cal Supremes' decision more than thirty years ago in Barker v. Lull Engineering Co. (1978) 20 Cal.3d 413, 432.

Sometimes, the consumer expectations test is easy to figure out. The right front wheel splits in half, and the car spins out of control. Most consumers probably don't expect that to happen, and most juries would find that the car, or the wheel, or both were defective. And obviously, the consumer expectation test is a big plus for plaintiffs, because it renders all the defense evidence about risks, benefits, design considerations, etc. to be completely irrelevant.

But what about when the plaintiff isn't a consumer? Or when he doesn't have any expectations? Well, I always thought the law was this:

[T]he consumer expectations test is reserved for cases in which the everyday experience of the product's users permits a conclusion that the product's design violated minimum safety assumptions, and is thus defective regardless of expert opinion about the merits of the design.

. . . .

By the same token, the jury may not be left free to find a violation of ordinary consumer expectations whenever it chooses. Unless the facts actually permit an inference that the product's performance did not meet the minimum safety expectations of its ordinary users, the jury must engage in the balancing of risks and benefits. . . .

And yet. And yet, we've had two court of appeals cases so far holding that the consumer expectation test applied in asbestos cases to plaintiffs who, while in the Navy, were exposed to asbestos pipe insulation (Sparks v. Owens-Illinois, Inc. (1995) 32 Cal.App.4th 461, 472) and asbestos valve and pump packing (Jones v. Crane, Inc. (2005) 132 Cal.App.4th 990, 1002–1003). Clearly, there were no "ordinary consumer expectations" about either of these highly specialized products. Nonetheless, in Sparks, the Court of Appeal held that the fact workers used insulation materials without wearing respiratory protection was sufficient to create an inference that they had no expectation the friable asbestos coming off the block would hurt them. Id. at 475-76.

Similarly, in Jones, the court held the evidence of failure to take precautions sufficient to support the reasonable expectations instruction:

The jury reasonably could find that those working with defendant's products did not expect to develop lung cancer from simply breathing the dust created in the ordinary use of the product. The jury therefore could reasonably infer that defendant's products did not meet the "`minimum safety assumptions of its ordinary consumers.

Saller did not work personally with pipe covering, but observed other workers use it in the barrel reconditioning plant and in the filling plant. He saw other workers applying the Mundet insulation to pipes, and also saw them applying it to pumps and valves. About once a week he was 10 feet or less from where Mundet insulation was being applied in the barrel reconditioning plant, and in the filling plant he was closer than 10 feet from the insulation more than once a week.

Id. at ___.

So, Mr. Saller was not a "consumer" of asbestos insulation. There was no evidence of his expectations or the expectations of anybody else. That's ok:

Saller presented evidence concerning his exposure to the product . . . the circumstances surrounding his injury . . .and the objective features of the product relevant to an evaluation of its safety (the product was always cut or sawed when used, always produced dust, and was frequently used). Given these circumstances and the widespread use of asbestos in refineries and other industries, the jury could infer that the ordinary consumer of the product, namely refinery workers, would assume that the use of the product was safe, notwithstanding the amount of dust produced.

Id., at ___.

So to make sure we understand the situation, a plaintiff who was by no measure a consumer, with no evidence that he or anyone else had any expectations about asbestos insulation or its safety, may go to the jury on the "consumer expectation test." If the consumer expectation test applies here, it applies darned near anywhere, and the risk benefit test is all but dead.